Canadian Securities Course (CSC) Level 1 Practice Exam

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What are the determinants of the exchange rate?

Weather conditions and agricultural output
Government regulations and policies
Commodities, inflation rate, interest rate, trade, economic performance, public debts, and deficits
Consumer spending habits and savings rates

The correct answer is: Commodities, inflation rate, interest rate, trade, economic performance, public debts, and deficits

The correct answer is C. The determinants of the exchange rate include commodities, inflation rate, interest rate, trade, economic performance, public debts, and deficits. These factors all have significant impacts on the supply and demand for a country's currency in the foreign exchange market, ultimately influencing the exchange rate. Options A, B, and D are not directly related to the determinants of the exchange rate. Weather conditions and agricultural output (Option A), government regulations, and policies (Option B), as well as consumer spending habits and savings rates (Option D), do not typically play a direct role in determining the exchange rate as the factors mentioned in Option C do.